POSCO to build FINEX steel mill in Iran

POSCO Energy CEO Yoon Dong-jun, front row left, poses with Korea Electric Power Corp. (KEPCO) CEO Cho Hwan-eik, second from left, and Abdolreza Zorofchian, chairman of Pars Kohan Diar Parsian Steel (PKP), third from left, after signing a memorandum of understanding at the Korea-Iran Business Forum in Tehran, Monday. Under the agreement, POSCO Energy and KEPCO will operate and manage a power plant and a desalination facility, which will be built by POSCO Engineering & Construction, near POSCO’s steel mill in the Chabahar Free Trade-Industrial Zone. / Courtesy of POSCO Energy

By Lee Hyo-sik

POSCO has signed a memorandum of agreement (MOA) with Iranian steelmaker, Pars Kohan Diar Parsian Steel (PKP), to jointly build a steel mill in the Middle East country incorporating its FINEX technology, the company said Monday.

The world’s fourth-largest steelmaker said it will cost about $1.6 billion to construct the FINEX plant, capable of producing 1.6 million tons of steel annually, in Iran’s Chabahar Free Trade-Industrial Zone (CFZ). POSCO Engineering & Construction (E&C) will build the mill.

During the Korea-Iran Business Forum held in Tehran, Monday, POSCO’s electricity-generating affiliate POSCO Energy also signed a memorandum of understanding (MOU) with PKP to construct a 500 megawatt power plant using excess gas generated by the envisioned steel mill.

In cooperation with Korea Electric Power Corp. (KEPCO), the company will also construct a desalination facility nearby to desalinize 60,000 tons of seawater every day.

“Last September, we signed the MOU with our Iranian counterpart and today’s agreement has all but finalized the $1.6 billion project,” a POSCO spokesman said. “We will continue to work hard to complete the scheme as scheduled.”

As soon as the United States and other Western economies lifted sanctions on Iran in January, POSCO moved quickly to get the stalled FINEX plant project back on track.

Under the agreement, POSCO will shoulder 8 percent of the investment and transfer its POSCO innovative steelmaking technology (POIST) to its Iranian partner. POIST is a combination of FINEX and compact endless cast and rolling mill (CEM) technologies. PKP will pay for the remaining 92 percent.

According to POSCO, FINEX technology allows the direct use of cheap iron ore fines and non-coking coal as feedstock, resulting in significantly lower operating costs and emissions than a blast furnace.

“First, we will build the 1.6 million-ton steel mill using FINEX and CEM technologies,” the spokesman said. “We will then construct additional facilities to produce 600,000 tons of cold-rolled coils and galvanized steel sheets.”

In cooperation with KEPCO, POSCO Energy will operate and manage the facilities, which will provide power and fresh water to the FINEX plant.

“We believe the planned power plant and desalination facilities will help POSCO operate its first steel mill in Iran,” a POSCO Energy spokesman said. “Using them as a springboard, we will seek to secure more business opportunities in Iran and the region.”